Editorial : Efficiency for sugar, not patronage, subsidy

The Centre’s Rs 8,000 crore-plus package, including a costly buffer
stock(भंडारण/सुरक्षित भंडार), for
the sugar sector, stricken(चोट खाये हुए ) with
over Rs 22,000 crore in arrears to farmers, is really no more than a palliative(शांति
देनेवाला/उपद्रव ) adjective
peacemaking

The fundamental flaw in sugar is that policy blocks integration(एकता/संघटन)of cane growing and conversion of cane into sugar. The mutual
dependence of cane growers and their monopsonic buyers — cane cannot be stored
and transported but must be crushed(दबाना/ कुचल दिया ) immediately
after harvest(फसल/पैदावार),which
means sale to the mill nearby — and the uncertainty of yearly production and
demand make it logical to vertically(लंबवत /उदग्रता से) integrate growing and crushing, to avoid the protracted
and costly haggling needed to find a price that leaves both farmers and the
mills happy.

Populist
and unrealistic state advised prices for cane kill economic viability, lead to
alternating periods of glut and shortage, with the result that cane arrears are
a by-product alongside bagasse.

The Rangarajan committee has recommended norms for
profit-sharing between mills and farmers, as a form of virtual(वास्तविक/आभासी) integration, but that takes integrity(अखंडता/सत्यनिष्ठा) for granted in books of accounts in the long tail of small
and medium enterprises that pass themselves off as sugar mills. The sprinkling(छिड़काव) of capacity is itself due to flawed policy. Far too much
mill capacity came up in water scarce but subsidy-sodden peninsular(प्रायद्वीप-संबंधी) India, and not enough in the far more agro-climatically suited(अनुकूल
) Indo-Gangetic plains like those
in Bihar. Sugar cooperatives would have been welcome, but the ground reality is
that such structures almost uniformly underperform or worse, due to routine
political interference by the powers that be. The way forward is farmer-owned
producer companies and/or leasing of land by mills for growing cane. Sugar
calls for efficiency(क्षमता/योग्यता), not
the sugar-coating of subsidy andpatronage(संरक्षण/सहायता).